Due to the strong hail in the Belgian region of Borgloon, less fruit is expected to come from the area this year. Jackie Boussier, of the eponymous trading company isn’t very optimistic about the coming season. Besides the hail the sector is also suffering from competition from Eastern Europe, says the experienced trader.
“I expect 20 to 30 percent less fruit compared to last year,” says Jackie. “The cause of this is the heavy hail which has made the fruit completely worthless. It will be a difficult year. When we spoke to the trader at the start of October he has just returned from a visit to three pear growers. The visits have not cheered him up. “Of the three companies there is only one of them whose fruit we can use,” he says. “The rest can’t be used. We have to watch the quality.”
Silent protest
Quality is very important for the company, which mainly focuses on the Norwegian and German market. Both markets only demand quality fruit. Until 2014 a lot of fruit of lesser quality could go to Russia, says Jackie, but that border is still closed. This has direct consequences for the top fruit. Around Borgloon they are feeling the hard consequences of this political conflict. The growers’ and traders’ displeasure is expressed in the banner by the roadside: ‘Politicians give us Russia back’. A silent protest against the trade war.
The absence of the Russian market isn’t the only problem. This change in the global market forced Eastern European countries to look for new markets. “We are also bothered by competition from Eastern Europe,” continues Jackie. “Poland in particular expects more volumes of apples this year compared to last year. This makes the trade difficult for us.” The Belgian growers are also being confronted with low prices this year. This makes the season extra difficult.
Hail damage and intervention
“Due to the hail we have to do more work when sorting and picking,” explains Jackie. “We have to do it well, as the hail mustn’t have any effect on the quality of our fruit.” Those low prices aren’t just for the damaged fruit; the class 1 fruit also isn’t producing enough. “Pears cost around 50 cents. That’s hardly enough to cover the cost price.” The prices that the industry offers are also unattractively low. This year a lot of fruit will go to the intervention measure, the Belgian trader expects. “At the auctions the squares are filled with fruit for the intervention. Masses of fruit are going there."
Jackie believes they will have to look the other way when it comes to the restrictions on the intervention measure this year. “I think they’ll make an exception this year. The government has to be lenient or there will be no more fruit growers left in two or three years.” This is how great the need is, according to the trader. The fact that the cost price is hardly being earned is no good for the sector. Although promotions are a good initiative, it’s no more than a band aid on a bullet hole. “It’s great that it’s being done, as there is a lot of fruit for the domestic market this year. All sorts of things are being done to promote the fruit, this can’t be denied, but it’s not really helping.”
Eastern European competition
There are also a lot of growers who, due to the low prices, opt to store the quality fruit in hopes of better prices. This doesn’t make it easier for the exporter. Jackie wonders whether it will help the growers much. “The storage is in order. This isn’t the problem, but when do you want to market the fruit?” Jackie wonders out loud. “Later in the season there is competition from New Zealand and the southern countries. Storage is also an expensive move and the question is whether you’ll make that money back.”
The competition from Eastern Europe isn’t just noticeable in the prices. The exporter talked about being offered product from Poland and the Czech Republic. “But that isn’t our trade. We’re an exporter,” Jackie responds. “As well as this, if we buy the fruit from there, there will be added costs. Then we’ll still be too expensive, as they compete on the same markets.”
Boussier’s Norwegian customers are also being offered Polish apples. This is less so for the Conference pears, as the Poles mainly go for the apple cultivation. “The Norwegian market is more or less full,” says the trader. “The country has a small population, so there aren’t heaps going there. The market is mainly in the hands of the wholesale companies, who have contacts across the globe.”
New markets and the future
New markets such as India and China are the future, but at the moment the markets are still too small. “They are working hard but they don’t have the quantities yet. We also have competition from low wage countries there and the question is whether the population will achieve the standard of living to spend much money on fruit.”
Although the demand for organic apples and club varieties is rising, it’s a question of whether Western Europe can compete against Eastern Europe here. Poland is also investing in organic cultivation and is planting club varieties, according to Jackie. “Organic is strongly on the rise, there is good demand for it and more is paid for it.” The exporter also receives demand for organic apples, but it’s hard to meet the demand. “There is generally too little organic fruit available to build a business.”
Despite the dark tone, Jackie does see a future for fruit cultivation in Western Europe. We can strongly define ourselves with quality compared to Eastern Europe,” he says. “Our customers just have to be prepared to pay more for quality. As long as fruit is grown in the region there is a future.” The latter is under pressure. Many growers around Borgloon are between 50 and 55 years old and there are few successors. And Russia? Despite the banners by the road, that market offers little hope. “If you look at how much Russia is planting, it doesn’t look good,” concludes Jackie. “I suspect enough will be planted for the domestic market in four to five years and that they will need relatively little import by then.” (RM)
jackie@boussier.be